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Multinational Enterprises, International Trade and Productivity Growth: Firm-Level Evidence from the US

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  • Keller, Wolfgang
  • Yeaple, Stephen R

Abstract

We estimate international technology spillovers to US manufacturing firms via imports and foreign direct investment (FDI) between the years 1987-96. In contrast to earlier work, our results suggest that FDI leads to significant productivity gains for domestic firms. The size of FDI spillovers is economically important, accounting for about 14% of productivity growth in US firms between 1987-96. In addition, there is some evidence for imports-related spillovers, but it is weaker than for FDI. The Paper also gives a detailed account of why our study leads to results different from those found in previous work. This analysis indicates that our results are likely to generalize to other countries and periods.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3805.

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Date of creation: Feb 2003
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Handle: RePEc:cpr:ceprdp:3805

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Related research

Keywords: foreign direct investment; learning externalities; technology spillovers;

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References

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  1. Keller, Wolfgang, 2002. "International Technology Diffusion," CEPR Discussion Papers 3133, C.E.P.R. Discussion Papers.
  2. Aitken, Brian & Harrison, Ann & DEC, 1994. "Do domestic firms benefit from foreign direct investment? Evidence from panel data," Policy Research Working Paper Series 1248, The World Bank.
  3. Jonathan Eaton & Samuel Kortum, 1994. "International patenting and technology diffusion," Finance and Economics Discussion Series 94-35, Board of Governors of the Federal Reserve System (U.S.).
  4. Keller, Wolfgang, 1998. "Are international R&D spillovers trade-related?: Analyzing spillovers among randomly matched trade partners," European Economic Review, Elsevier, vol. 42(8), pages 1469-1481, September.
  5. Fosfuri, Andrea & Motta, Massimo & Ronde, Thomas, 2001. "Foreign direct investment and spillovers through workers' mobility," Journal of International Economics, Elsevier, vol. 53(1), pages 205-222, February.
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  9. Görg, Holger & Greenaway, David, 2003. "Much Ado About Nothing? Do Domestic Firms Really Benefit from Foreign Direct Investment?," IZA Discussion Papers 944, Institute for the Study of Labor (IZA).
  10. Jonathan E. Haskel & Sonia C. Pereira & Matthew J. Slaughter, 2002. "Does Inward Foreign Direct Investment Boost the Productivity of Domestic Firms?," Working Papers 452, Queen Mary, University of London, School of Economics and Finance.
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  16. Boyan Jovanovic & Peter L. Rousseau, 2002. "The Q-Theory of Mergers," NBER Working Papers 8740, National Bureau of Economic Research, Inc.
  17. Wolfgang Keller, 2000. "Geographic Localization of International Technology Diffusion," NBER Working Papers 7509, National Bureau of Economic Research, Inc.
  18. Nickell, S.J., 1993. "Competition and Crporate Performance," Economics Series Working Papers 99155, University of Oxford, Department of Economics.
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  21. Bin Xu & Jianmao Wang, 1999. "Capital Goods Trade and R&D Spillovers in the OECD," Canadian Journal of Economics, Canadian Economics Association, vol. 32(5), pages 1258-1274, November.
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  23. Mark E. Doms & J . Bradford Jensen, 1998. "Comparing Wages, Skills, and Productivity between Domestically and Foreign-Owned Manufacturing Establishments in the United States," NBER Chapters, in: Geography and Ownership as Bases for Economic Accounting, pages 235-258 National Bureau of Economic Research, Inc.
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  28. Zvi Griliches & Jacques Mairesse, 1981. "Productivity and R and D at the Firm Level," NBER Working Papers 0826, National Bureau of Economic Research, Inc.
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Citations

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Cited by:
  1. Acharya, Ram C. & Keller, Wolfgang, 2007. "Technology Transfer through Imports," CEPR Discussion Papers 6296, C.E.P.R. Discussion Papers.
  2. Blyde, Juan & Kugler, Maurice & Stein, Ernesto, 2004. "Exporting vs. outsourcing by MNC subsidiaries: which determines FDI spillovers?," Discussion Paper Series In Economics And Econometrics 0411, Economics Division, School of Social Sciences, University of Southampton.
  3. Lahimer, Noomen, 2009. "La contribution des investissements directs étrangers à la réduction de la pauvreté en Afrique subsaharienne," Economics Thesis from University Paris Dauphine, Paris Dauphine University, number 123456789/1167 edited by Goaied, Mohamed & Bienaymé, Alain, September.
  4. Juan José Echavarría & María Angélica Arbeláez & María Fernanda Rosales, . "La Productividad y sus Determinantes: El Caso de la Industria Colombiana," Borradores de Economia 374, Banco de la Republica de Colombia.
  5. Gorodnichenko, Yuriy & Svejnar, Jan & Terrell, Katherine, 2007. "When Does FDI Have Positive Spillovers? Evidence from 17 Emerging Market Economies," IZA Discussion Papers 3079, Institute for the Study of Labor (IZA).
  6. Volker Grossmann & Thomas Steger, 2007. "Anti-Competitive Conduct, In-House R&D, and Growth," CESifo Working Paper Series 1963, CESifo Group Munich.
  7. Carol Corrado & Paul Lengermann & Larry Slifman, 2007. "The contribution of multinational corporations to U.S. productivity growth, 1977-2000," Finance and Economics Discussion Series 2007-21, Board of Governors of the Federal Reserve System (U.S.).
  8. Yasar, Mahmut & Morrison Paul, Catherine J., 2008. "Foreign Technology Transfer and Productivity: Evidence From a Matched Sample," Journal of Business & Economic Statistics, American Statistical Association, vol. 26, pages 105-112, January.

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